1.2 Enterprise, Business And The Economy Flashcards
Role of an entrepreneur, entrepreneurial motives, factors of production, specialisation, the wider economic enviroment
1
Q
What is creative destruction?
A
Organising factors of production to create and set up an enterprise
2
Q
Structural Change
A
- New businesses are ‘created’ to make and market new products. Those businesses that market older products may find that their profits are falling.
- Eventually they must either use down altogether or move into different markets where they can still make a profit.
3
Q
What do Structural change and Creative destruction lead to?
A
Economic Growth
4
Q
Equation for Total Revenue
A
Total revenue = volume sold x average selling price
5
Q
A business that wants to increase revenue needs to either:
A
- Increase the amount or volume sold (higher quality)
- Achieve a higher selling price
- Or both
6
Q
Equation for Profit
A
Profit = Sales Revenue - Costs of production
7
Q
Non-Financial Motives
A
- Ethical stance
- Social entrepreneurship
- Independence
- Home working
